Why is Pricing so Tricky- Reprise

Pricing is something I’ve been thinking about and studying for a while.  I’m writing the fab Survey Sherpa mini-course for my micro-pricing experiment.  I thought I’d share an earlier pricing post from my last blog with you.  Enjoy!

 

Hey, it’s my first day back in the office after 9 glorious days in Savannah, GA where I enjoyed more than my share of southern hospitality and good eats!   You know how hard it is to get back in the saddle after a vacation, right?  Well, I thought I’d be fishing for today’s topic but the universe is good- one dropped right in my lap this morning.  And, it’s on one of my favorite, or should I say most puzzling, topics.

Pricing is Puzzling

Which one?  Pricing!   I don’t know a single business person, including myself, who hasn’t struggled with or second-guessed about setting prices for services or products.   It’s part of the process, but gosh, it’s tough to figure out what the right start is.

Have you ever  heard the saying, You can only charge what the market will bear? That’s probably the most common advice you hear about setting prices.   I’ve heard experienced wedding professionals  tell newcomers to survey the local market then pick a price that’s somewhere in the range of prices, not too high and equal to the amount of experience you have. It seems reasonable doesn’t it?

Here’s what clients tell me they do and you probably did, too.  You sheepishly call around disguising yourself as a bride to ask.  You check websites (thankful for when someone actually publishes their prices)  for the prices of  full services, day of coordination, or a half day shoot or 3 hours of DJing, etc.  You get the average.  Decrease it significantly because you’re newly trained or inexperienced or only working part-time (or all three!)  and  Whew- you’re done.    Then, doubt creeps in.

Is that price gonna work?  It’s soo low- clients will flood in.  Maybe, it’s too high especially now when money is tight

What will brides think? Will they choose me?

What will colleagues say?  Will they think I’m naive or greedy.

Those  questions that sneak into your thoughts in the middle of the night, keeping you awake wondering if you’re crazy to start a business in the first place.  I’m with ya sister!

The hardest part of getting ready to launch Positively Wed was deciding on pricing.  In fact, it was so tough I decided to skip it and offer my information for free.   I feel great doing free teleseminars.  I truly believe that being able to run your business in a way that’s positive yet with firm expectations and meaningful communication is the best way to be happy and make money.

However, giving away my hard-earned expertise and talents doesn’t serve me or you.  Just like undervaluing your wedding services or products, even in a recessionary market, doesn’t serve you or your brides.  Why?  Simply because if we go out of business, we can’t serve anyone or have the joy of sharing what we love.

This dilemma- being stuck between charging what you’re worth and charging what your market will pay- challenged me so much I decided to look for a better solution than splitting the difference.  Really, this is a universal problem for small business owners and there’s a ton of information documenting the problem.   I’ve narrowed the issues down a bit.
Top three issues I see for wedding professionals around pricing are:

  • Not knowing your own internal profitability numbers and indicators
  • Not learning or using the available business knowledge
  • Not recognizing or addressing the emotional component of setting prices

Know Your Numbers

Most folks get into the wedding business because they have a passion for the celebration and are talented at related services like planning, photographer or entertainment.  Maybe that’s  you, too.  The fun ends when it’s time to actually run the business. That’s why you see folks with subpar marketing materials or websites (or heaven forbid, no site at all).   They’d rather be doing something else and it shows.

I’ve run my own training/coaching  business for the past 18 years and I can relate. But the moment I got more interested in the ‘yucky numbers side’ like understanding ROI and how to determine cost of services is the moment things turned around.

I realized the more knowledge I had, the more money I could make, which meant the more time I could spend doing the fun stuff like helping all of you succeed.   You might recall that when I launched I was offering private coaching sessions.  I realized after strapping myself to my chair and doing the numbers analysis that the service wasn’t sustainable or profitable, even though I love the one-to-one interaction with my coaching clients.  So poof.  It’s gone. (Note: I figured out a better model so my coaching program will be up soon.)

How’d I figure it out?  Not on my own, believe me.  I’d rather have root canal than think about numbers.  But I found a couple of books and websites that inspired me.  Namely, Sean Low’s site puts a business spin on being creative that I find easy to  understand and implement.  Same is true for Michele Loretta and her Simple Plan. She puts creating a business plan into bite-sized chunks and makes it enjoyable because you’re doing it with other motivated folks.

I also turned to my old friends: books.  Never had  a problem a book couldn’t help me solve.  So, when I came across Found Money and the Art of Pricing, well, I read them both.  Truth be told,  Found Money is my ‘throne’ reading material so I get through a few pages each day.    Hey- if I had to read it straight through I’d never finish; I know that about myself.  But when I do, I’ll be armed to kick some profitability butt!

(NOTE: These summits aren’t available, but I do have a Jiffy Expert Interview with Luke Adams of Profit Predictor coming soon!) I feel so strongly about educating wedding pros I’m developing a series of teleseminars to respond to  the pricing issues mentioned for Season Two of the Brideability Summits starting in April. I’d sure welcome your  thoughts on what are the biggest problems or anything else that would make it more useful. Just email me. And if you want notice about the calls, get on  my list  It’s not hype-y  and you can unsubscribe at any time.

I’m really looking forward to the day when a new client says ‘I had to work with you because I love what you do and the price is right!’, aren’t you?

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